Inflation up at 0.37 percent, prices of essential items soar

Essential prices rose exorbitantly on yearly basis, fuelling inflation to 0.37 per cent during the second week of September from 0.12 per cent a week ago when it first made it into positive territory after a gap of 13 weeks.

Overall prices of raw food items climbed by 15.64 per cent during the week ended September 12 year-on-year, driven mainly by a 44.85 per cent rise in vegetable prices.

Among vegetables, potatoes turned costlier by 75 per cent, pulses by 21 per cent and rice by 17 per cent. Processed food items continued their rising trend. Their prices were up 12.68 per cent on yearly basis as sugar turned dearer by 43.35 per cent.

However, when seen from a weekly perspective, price rise in essential food items did not appear that sharp except for fresh water fish that was up 11 per cent. Other food items rose in the range of one to two per cent or saw a decline.
    
The rise in inflation for the week comes despite a high base of 12.42 per cent a year ago.
    
Although inflation at 0.37 per cent does not seem too high as the rate of price rise is measured only on a yearly basis in India, the inflation has already crossed the psychologically important five-per cent mark for this fiscal so far.

The inflation this fiscal was at 6.12 per cent, marginally down from 6.62 per cent a year ago.
    
However, analysts said surging prices should not prompt RBI to signal hike in interest rates as the step would not help arrest inflation, but would instead retard growth.